Morning Line: What's to blame for the rocketing oil price?

Now that the main culprits behind the sub-prime crisis have been named the banks, rating agencies, regulators and so on - a new scapegoat is needed for the latest economic woe, the rising oil price.

Yesterdayevery politician with an audience of atleast onemade forecasts about what price oil will reach ($150 per barrel said the Russian president), told people to cut their addiction to oil (this from the British chancellor and US Treasury Secretary) or just stated the bleeding obvious (British PM).

While the politicians were pontificating, the oil price was cruising to a new record $145 a barrel.

You might be wondering why policy-makers don't stop throwing out warnings about the soaring oil price and actually do something about it. The answer it seems is that we are involved in a great global hunt for a fall-guy.

Pinning the blame

A group of British MPs think the fault might lie in traders speculating on oil markets. The Treasury Committeeyesterday announced it was going to investigate the regulation of oil markets. They haven't confirmed who will be questioned, but we can hope that some big hitters will be hauled before the panel.

In the US a number of bills have been introduced to put paid to speculation pushing up crude oil prices. These include the 'End Oil Speculation Act'. And presidential hopeful Barack Obama has even been on the act; he says he can halve the price of oil with a set of proposals to clampdown on speculators. But as Reuters reported earlier this week, time is at a premium as US lawmakers are soon to head into the Summer recess. Plus politicians in the US have been accused of not understanding the way the oil markets work and for making traders scapegoats for the problem.

Sois the weaker dollar reducing supply increasing demand the root of the problem? On a visit to the UK yesterday, US Treasury Secretary Hank Paulson said no, it can't be. Paulson said that while the dollar has onlydepreciated some 25 percent since February 2002, oil has gone up by more than over 500 percent, and in every currency.

Rather Paulson and UK chancellor Alistair Darling chose to lay the blame rather generically at the doormats of the US and Britain, calling for the two countries to end their addiction to oil, reduce dependence on foreign energy imports and promote investment in renewablealternatives. Again, a lot of talk but what will come out of it?

So perhaps OPEC, the 12 nation oil cartel,isat fault?OPEC has been criticised for cutting production too much as it hadover-estimated the amount being produced by non-members.Russian President Dmitry Medvedev yesterday forecast that oil prices will hit $150, but Bloomberg reportsthathe told reporters in Moscow that the influence of OPEC was exaggerated.

So surely it must be the vast demand from China and India that is pushing up the price to record highs? Step in the Indian petroleum minister Murli Deora, who according to the India Economic Times told the World Petroleum Congress yesterday that blaming these two countries was 'completely devoid of merit'.

Deora told delegates that while India and China accounted for one-third of the world's population, their combined oil consumption was less than one-eighth of global consumption.

Back to Britain where our own prime minister Gordon Brown put the price rise down to an imbalance of supply and demand. Nice and simple, straight to the point, but what are you going to do about it Mr Brown?